The Federal High Court in Abuja has been asked to stop the use of dollar as a means of payment in the country.
The court is also asked to restrain the Central Bank of Nigeria (CBN) from allowing market forces to determine the exchange rate of naira to the dollar.
These are contained in a suit by rights’ activist, Femi Falana (SAN), with the CBN as the sole respondent.
Falana said the CBN has “dollarised the economy” to the extent that the dollar has become a legal tender, with school fees, rents and others now being charged and paid in dollars “to the detriment of the nation’s economy”.
He argued that CBN’s monetary policy resulted in the naira chasing a few dollars, with an attendant weaker naira and adverse multiplier effects, such as rising inflation, closure of factories and increasing unemployment.
Falana noted that even when the CBN claimed to have fixed the exchange rate at N198 to a dollar and President Muhammadu Buhari was refusing to devalue the naira, the CBN has “allowed market forces to increase the exchange rate to over N400 to a dollar”.
The plaintiff, in a supporting affidavit, said “the devaluation of the currency and dollarisation of the economy have made mockery of the 2016 budget.
“The monetary policy of the defendant (the CBN) has led to a situation whereby too much naira chase few dollars, thereby making the naira weaker in relation to the dollar and instigating an adverse multiplier effect.
“The monetary policy of the defendant has also led to increasing costs, rapidly rising inflation and interest rates, closure of factories and high unemployment.”
The plaintiff asked the court to determine “whether the monetary policy of the defendant, which allows market forces to fix and determine the exchange rate of the naira is not a violation of Section 16 of the Central Bank of Nigeria (Establishment) Act 2007 and Section 16 of the 1999 Constitution as amended”.
He also seeks a determination whether the CBN’s decision to allow the dollar as legal tender is not a contravention of Section 20 of the CBN Act.
Falana prayed the court as follows:
*A declaration that by virtue of Section 16 of the CBN Act 2007, the defendant shall fix and determine the exchange rate of the naira by a suitable mechanism devised for that purpose.
*A declaration that the monetary policy of the defendant, which allows market forces to fix and determine the exchange rate of the naira is illegal and unconstitutional as it violates Section 16 of the CBN Act 2007.
*A declaration that the dollarisation of the economy through the use of the dollar as a legal tender in Nigeria is illegal and unconstitutional as it violates Section 20 of the CBN Act, 2007.
*An order of perpetual injunction restraining the defendant from allowing market forces to determine the exchange rate of the naira.
*An order directing the defendant to stop use of the dollar as a legal tender in Nigeria.”